Stolen Bitcoin from Coldcard Hardware Wallet Exploit Begins Moving Through Mixers as Multiple Attackers Drain Funds

A critical firmware bug in Coinkite's Coldcard hardware wallets has allowed at least 15 independent attackers to drain up to $130 million (2,055 BTC) from roughly 7,300 addresses. The vulnerability, originating in a March 2021 code change, bypassed the device's hardware randomness chip, reducing key entropy to a guessable 40 bits. While the largest attacker's stash of 1,159 BTC remains unmoved, a smaller exploiter has begun laundering 64 BTC and 200 ETH through Wasabi and Tornado Cash mixers.

Coldcard firmware vulnerability

• ▪The Coldcard firmware vulnerability originated in March 2021 with firmware version 4.0.0, which carried a build setting that skipped the hardware randomness chip.
• ▪The Coldcard vulnerability was caused by a build guard using '#ifndef' that checked whether a setting existed rather than whether it was switched on, allowing the build to complete with the setting defined as zero.
• ▪A firmware bug in Coinkite's Coldcard hardware wallets bypassed the dedicated hardware randomness chip, routing seed generation to a software pseudo-random generator fallback.
• ▪Coinkite released fixed firmware for affected Coldcard models, but the update does not repair existing compromised seed phrases, requiring users to generate new seeds and migrate funds.

Bitcoin theft scale

• ▪Attackers have stolen approximately 1,596 BTC from roughly 7,300 Coldcard addresses across three confirmed waves, with a suspected fourth wave potentially raising total losses to 2,055 BTC, worth about $130 million.
• ▪The largest single sweep by a Coldcard attacker drained 1,082 BTC from 1,196 wallets within a 41-minute window.

Multiple attacker activity

• ▪Galaxy Research identified at least 15 separate attackers exploiting the Coldcard vulnerability, labeling the fifteenth attacker's footprint as 'O' after they drained 12 BTC from 126 addresses.
• ▪On-chain transaction construction differences across the Coldcard attack waves suggest that multiple independent actors exploited the same firmware vulnerability.

Stolen funds laundering

• ▪A separate, smaller Coldcard attacker routed 64 BTC into the Wasabi mixing protocol and 200 ETH into Tornado Cash to obscure the transaction trail.
• ▪The smaller Coldcard attacker mixed 10 BTC first, then split the remaining 54 BTC into repeated 7 BTC chunks for additional mixing, creating a recognizable pattern for investigators.
• ▪The largest Coldcard attacker controls 1,159 BTC across seven or eight addresses, which has remained entirely unmoved and has not been sent to mixers or exchanges.

Victim impact

• ▪Galaxy Research has shared confirmed Coldcard attacker and victim addresses with cryptocurrency exchanges, cyber-investigation groups, and U.S. law enforcement.
• ▪Canadian entrepreneur Jonathan Goodman reported losing 18.25 BTC, worth approximately C$1.6 million, from his offline Coldcard wallet on the night of July 29, 2026.

Hardware wallet entropy generation

• ▪The Coldcard firmware bug reduced effective seed entropy from the target of 128 bits to about 40 bits on older Mk2 and Mk3 models, and to roughly 72 bits on newer models.
• ▪Bitcoin Core developer Luke Dashjr warned that common dice are not cryptographically secure and advised users to use precision casino dice alongside other entropy sources.
• ▪Coldcard users who generated their seed phrases using at least 50 private physical dice rolls or a strong BIP-39 passphrase were unaffected by the firmware randomness vulnerability.

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